Mcdonalds

Introduction By the late- 1990s fast-food chain McDonalds had enjoyed 40 years of exceptional performance. McDonald’s brand mission is to be a customers’ favorite place and way to eat. McDonald’s worldwide operations are aligned around a global strategy called the Plan to Win, which center on an exceptional customer experience – People, Products, Place, Price and Promotion. They are committed to continuously improving theirs operations and enhancing customers’ experience. McDonalds place the customer experience at the core of all they do. McDonald’s customers are the reason for their existence.

So, McDonalds’s demonstrate appreciation by providing them with high quality food and superior service in a clean, welcoming environment, at a great value. Their goal is quality, service, cleanliness and value for each and every customer, each and every time. McDonalds are committed to people. They provide opportunity, nurture talent, develop leaders and reward achievement. They believe that a team of well-trained individuals with diverse backgrounds and experiences, working together in an environment that fosters respect and drives high levels of engagement, is essential to continued success.

McDonald’s business model, depicted by three-legged stool of owner or operators, suppliers, and company employees, is foundation, and balancing the interests of all three groups is a key. McDonalds operate their business ethically. Sound ethics is good business. At McDonald’s, they hold their selves and conduct the business to high standards of fairness, honesty, and integrity. McDonalds are individually accountable and collectively responsible. McDonalds give back to our communities.

They take seriously the responsibilities that come with being a leader. McDonald’s help their customers build better communities, support Ronald McDonald House Charities, and leverage their size, scope and resources to help make the world a better place. McDonalds grow their business profitably. McDonald’s is a publicly traded company. As such, they work to provide sustained profitable growth for their shareholders. This requires a continuous focus on McDonald’s customers and the health of our system. McDonalds strive continually to improve.

They are a learning organization that aims to anticipate and respond to changing customer, employee and system needs through constant evolution and innovation. Task 1 History of McDonalds The McDonald’s restaurant concept was introduced in San Bernardino, California by Dick and Mac McDonald of Manchester, New Hampshire. It was modified and expanded by their business partner, Ray Kroc, of Oak Park, Illinois, who later bought out the business interests of the McDonald brothers in the concept and went on to found McDonald’s Corporation.

In October 1948, after the McDonald brothers realized that most of their profits came from selling hamburgers, they closed down their successful carhop drive-in to establish a streamlined system with a simple menu of just hamburgers, cheeseburgers, french fries, shakes, soft drinks, and apple pie. The carhops were eliminated to make McDonald’s a self-serve operation. Mac and Dick McDonald had taken great care in setting up their kitchen like an assembly line to ensure maximum efficiency. The restaurant’s name was again changed, this time to simply “McDonald’s,” and reopened its doors on December 12, 1948.

In 1960, the McDonald’s advertising campaign “Look for the Golden Arches” gave sales a big boost. Kroc believed that advertising was an investment that would in the end come back many times over and advertising has always played a key role in the development of the McDonald’s Corporation. Indeed, McDonald’s ads have been some of the most identifiable over the years. In 1962, McDonald’s introduced its now world-famous Golden Arches logo. A year later, the company sold its billionth hamburger and introduced Ronald McDonald, a red-haired clown designed to appeal to children.

Arise of Burger King In the late 1970s, competition from other hamburger chains such as Burger King began to intensify. Experts believed that the fast-food industry had become as big as it ever would, so the companies began to battle fiercely for market share. A period of aggressive advertising campaigns and price slashing in the early 1980s became known as the “burger wars. ” Burger King suggested to customers: “have it your way” and had attracted many customer and affected McDonald’s sales and market share.

The predecessor to what is now the international fast food restaurant chain Burger King was founded in 1953 in Jacksonville, Florida, as Insta-Burger King. Inspired by the McDonald brothers’ original store location in San Bernardino, California, the founders and owners, Keith J. Kramer and his wife’s uncle Matthew Burns, began searching for a concept to open a new restaurant around. After purchasing the rights to two pieces of equipment called “Insta” machines, the two opened their first stores around a cooking device known as the Insta-Broiler.

The Insta-Broiler oven proved so successful at cooking burgers, they required all of their franchises to carry the device. After the original company began to falter in 1959, it was purchased by its Miami, Florida, franchisees James McLamore and David R. Edgerton. The two initiated a corporate restructuring of the chain; the first step was to rename the company Burger King. The duo ran the company as an independent entity for eight years, eventually expanding to over 250 locations in the United States, when they sold it to the Pillsbury Company in 1967. |

McDonalds| Burger King| The first original McDonalds opened in 1948, a restaurant created by Mac & Dick McDonalds in St. Bernandino| Burger King was founded in 1953 in Jacksonville, Florida, as Insta-Burger King by , Keith J. Kramer and Matthew Burns| Establish a streamlined system with a simple menu of just hamburgers, cheeseburgers, french fries, shakes, soft drinks, and apple pie. |  Equipment called “Insta” machines, the two opened their first stores around a cooking device known as the Insta-Broiler| In 1962, McDonald’s introduced its now world-famous Golden Arches logo. Expanding to over 250 locations in the United States| Delight each customer with unmatched quality, service, cleanliness and value every time| Dedicated to supporting and investing in our people – employees, franchisees, suppliers and restaurant guests | Place the customer experience at the core| “Customers always right” | Comparison of purposes of McDonalds & Burger King Task 2 McDonalds Internal Environment The most important factor comes from the internal company or precisely the management itself.

Managers must work closely with other department to come out with a strong marketing plan to boost McDonalds sales and efficiency of the operation. For example, the company management has a clear goals regarding importance of retaining customers by offering satisfaction to all its customers. Supplier Supplier is an important factor in the relation with McDonalds and its consumer. To have a good, continuous and no disruption supply, McDonalds must build a strong relationship with the suppliers. McDonalds must also consider that in the business market environment, it is competing with other fast food operators.

Any strike, supply shortages and increasing of prices in market must be monitored closely by McDonalds to ensure it will not affect its bottom line performance. Simple economic rules, the more the input cost, the more the company’s overall cost and pricing will be and thus it affect the volume of sales to customers. However, pricing is not as important as close relationship and integration that McDonalds must achieve with vendors to ensure sustainability of supplier. Distributers Marketing intermediaries are company that helps other company to promote, sell and distribute the goods to final buyers.

McDonalds is a franchise-based business, which headquartered in United States and with franchisee around the world. Franchise system is part of marketing intermediaries to actual corporate McDonalds in United States, which helps to popularize, distribute and expand McDonald’s business concept around the globe. However, in the midst to expand the marketing of its brand around the world it must choose a strong creditable franchisee to ensure their business performance is in line with standards set by corporate. McDonalds also need logistic or physical distribution firm especially to help in distribution nd transportation of goods and materials around the country to its restaurant. Customers Customers whether it is business or household buyer are important factor in microenvironment where McDonalds operates. For McDonalds it is more on household consumers, which is changing fast in the market trend. McDonalds must have a clear market segmentation to differentiate the consumers group and has a special marketing attention to each of them such as kiddies, adult, working professional and teenagers with different taste of its food.

Every consumer’s trend will affect the company bottom-line performance and if McDonalds cannot change or adapt to the changes of consumer behavior it might risk losing the market. Competitors Fast food industry has a wide range of competitors from small to big size in term of financial capabilities. For example in Malaysia, we have Kenny Roger’s, KFC, Pizza Hut, A&W and Marry Brown and to smaller scale, we have Ramli burger stall around the street corner serving the niche market. These are competitors of McDonalds, which McDonalds must compete by offering a differentiation in term of value and satisfaction to its customers.

Any values and benefits that McDonalds can utilize to differentiate it apart from all can be a strong marketing point to reach and conquer the market. Marketer must constantly understand ever-changing customer’s needs, needs by special group and develop strategies to strengthen the company positioning in domestic market. Employers The good things for this company is it provide a good training to all staff and especially to those involve in management level. Even in Malaysia, many management staff sent to Chicago to training on managing the operation of McDonald’s outlet.

Hamburger University in Illinois Chicago has graduated more than 70,000 managers who leads and manage the operation of McDonald’s outlet in the standard push upon them. Culture of training also prevails at McDonalds with over 32 hours of training for all new employees to ensure they understand the requirement and aspiration of McDonalds for continuation of best fast food restaurant service provider to the customers. McDonalds keen to train its own people and mission to be the best talent developer of people with the most committed individuals to Quality Service, Cleanliness and Value (QSC&V) in the world.

Task 3 McDonald’s Pestle Analysis McDonald’s is comprised of more than 30,000 local restaurants and serves 52 million people in more than 100 countries each day. The company is the largest food retailer in the world and is part of the current way of life. In order to remain competitive and an iconic, McDonald’s has developed programs and strategies for organizational behavior in its market environment. As a result, McDonald’s presented an excellent opportunity to observe external macro environment which called Pestle. Pestle stands for political, economic, social, technological, environmental and legal factors.

POLITICAL FACTOR The international operations of McDonald’s are highly influenced by the individual country’s policies enforced by each government. For instance, there are certain groups in Malaysia, Europe and the United States that take actions pertaining to the health implications of eating fast food. They have indicated that harmful elements like cholesterol and adverse effects like obesity are attributable to consuming fast food products. On the other hand, the company is controlled by the individual policies and regulations of operations.

Specific markets focus on different areas of concern such as that of health, worker protection, and environment. All these elements are seen in the government control of the licensing of the restaurants in the respective states of the country. For instance, there is an impending legal dispute in the McDonald’s franchise in Malaysia where certain infringement of rights and violation of religious laws pertaining to the contents of the food. There are also other studies those points to the infringement of McDonald’s Stores with reference to the existing employment laws in the target market.

Like any business venture, these McDonald’s stores have to contend with the issues of employment procedures as well as their tax obligations so as to succeed in the foreign market like Malaysia. Since it is apparent that the company is expanding continuously, it is wise to deal directly with the proper authorities in the respective markets that they intend to operate in. This way, the company can adopt a good way of establishing good relationship with the government. It is advisable that the company rests on the good graces of the government on which they will be penetrating.

To do this, all they have to do is accomplish all the prescribed acts and satisfy all the prerequisites for doing business. The company must also be acquainted with the law in order to know what their responsibilities and their possible liabilities. Also McDonalds should protect its workers by ensuring all the hiring, compensation, training or repatriation in accordance to the labour laws. ECONOMICAL FACTOR Organizations in the fast food industry are not excused from any disputes and troubles. Specifically, they do have their individual concerns involving economic factors.

Branches and franchises of McDonald’s have the tendency to experience hardship in instances where the economies of the respective countries are hit by inflation and changes in the exchange rates. The customers consequently are faced with a stalemate of going over their individual budgets whether or not they should use up more on these foreign fast food chains like McDonalds. Hence, these chains may have to put up with the issues of the effects of the economic environment. Particularly, their problem depends on the response of the consumers on these fundamentals and how it could influence their general sales.

In regarding the operations of the company, McDonald’s tend to import much of their raw materials into a specific country’s territories if there is a dearth of supply. Exchange rate fluctuations will also play a significant role in the operations of the company. The company’s international supply as well as the existing exchange rates is merely a part of the overall components needed to guarantee success for the foreign operations of McDonald’s. Moreover, it is imperative that the company be cognizant of the existing tax requirements needed by the individual governments on which they operate.

This basically ensures the smooth operations of the McDonald’s franchises. In the same regard, the company will also have to consider the economic standing of the country on which they operate on. The rate at which the economy of that particular country grows determines the purchasing power of the consumers in that country. Hence, if a franchise operates in a particularly economically weak country, their products shall cost higher than the other existing products in the market, then these franchises must take on certain adjustments to maintain the economies of scale.

Ideally before penetrating the market, the company must carry out a well conducted market research, especially in the movements in the economic environment which McDonalds had done before entering the global market due to which the company has been able to bear the frequency of the shifts in the inflation rate as well as the fluctuations in the exchange rates which affects the operations of any company. SOCIO-CULTURAL FACTORS Articles on the international strategies of McDonald’s seem to function on several fields to guarantee lucrative returns for the organization.

To illustrate, the organization improves on establishing a positive mind-set from their core consumers. McDonald’s indulge a particular variety of consumers with definite types of personalities. It has also been noted that the company have given the markets such as the United Kingdom and Malaysia, an option with regards to their dining needs. McDonald’s has launched a sensibly valued set of food that tenders a reliable level of quality for the respective market where it operates.

Additionally, those who are aged just below the bracket of thirty-five are said to be the most frequent consumers of McDonald’s franchises. The multifaceted character of business nowadays is reflected in the harsh significance of the information on the subject of the existing market. This procedure is essentially identified in the field as market research. Information with regards to the appeal and potential fields of the market would double as obstructions to the success of the company if this area of the operations is neglected.

In the case of McDonald’s they establish a good system in determining the needs of the market. The company uses concepts of consumer behavior product personality and purchasing decisions to its advantage which is clearly evident in case of Malaysia as the company was quick in removing their Pork products from Malaysia’s menu. It is said to have a major influence on the understanding of the prospective performance of the organization in a particular market. McDonalds should obtain the relevant information from the target market in addition to the individual customers of the organization.

It is imperative that before a franchise is granted to a particular market, a well drafted and comprehensive market research should be conducted initially so as to establish the acts that would conform to good customs, public policies, and morals of the said Country’s society. Similarly, the company should find out the shifts in areas like the consumer behavior and purchasing patterns of the market. Fundamentally, this is the key condition for executing a suitable customer relationship management system.

Also the company should constantly survey and learn about local culture to better understand and design the best product for them. TECHNOLOGICAL FACTORS McDonald’s generates a demand for its own products. The company’s key tool for marketing is by means of Online Facebook and Google ads, Collaboration with these websites to promote sales in India, television advertisements, banners and hoardings. There are similarly some claims that McDonald’s are inclined to interest the younger populations more. Other demonstration of such a marketing strategy is apparent in the commercials they use.

They employ animated depictions of their characters like Grimace, Ronald and Ham burglar. Other advertising operations employ popular celebrities to promote their products. The ‘like’ has become endorsers for McDonald’s worldwide “I’m loving it” campaign. Moreover, the operations of McDonald’s have significantly been infused with new technology. Elements like the inventory system and the management of the value chain of the company allows for easy payments for their suppliers and other vendors which the individual stores in respective markets deal with.

The integration of technology in the operations of McDonalds tends to add value to their products. Basically, this is manifested in the improvements on its value chain. The improvement of the inventory system as well as its supply chain allows the company to operate in an international context McDonalds use the internet to their advantage. The cost-effectiveness, interactivity and real- of the communications are a good way to find suppliers. It is also a good way to correspond with the respective McDonald’s headquarters in every Country.

The company must also look into the use of IT to enhance their inventory operations. As the operations in its inbound and outbound logistics improve, the company will expect significant savings and reduction of costs in the operations. ENVIRONMENTAL FACTORS The social responsibilities of McDonald’s on the country are influential to the operations of the company. These involve accusations of environmental damage. Among the reasons why they are charged with such claims is the employ of non-biodegradable substances for their drinks glasses and Styrofoam coffers for the meals.

Several civic groups in Malaysia have made actions to make the McDonald’s franchises in Malaysia aware of the rather abundant use of Styrofoam containers and the resultant abuse of the environment. The company should find out the environmental regime that governs the operations in every market. It should also monitor the waste disposal of the company. McDonald’s should minimize the use of Styrofoam materials and plastic cups. Constant updating of the social corporate responsibility is imperative and implements “Go Green”.

This should also entail that the headquarters should take in hand, a manner of internal control of those that would infringe upon this company objective. LEGAL FACTORS There has been the recurrent bellowing in opposition to the fast food industry. This has similarly made McDonald’s apply a more careful consideration on their corporate social responsibilities. On the whole, this addressed the need of the company to form its corporate reputation to a more positive one and a more socially responsible company. The reputation of McDonald’s is apparently a huge matter.

Seen on the website of the company, it seems that they have acquired strides to take in hand the key social censures that they have been berating them in the past decades. The company has provided their customers the relevant data that they need with reference to the nutritional substances of their products. This is to attend to the arguments of obesity charged against the products of the company. In the same way, the consumers provided freedom in choosing whether or not they want to purchase their meals. This is tied up with the socio-cultural attributes of the market on which they operate.

For instance, operations in predominantly Muslim countries require their meat to conform to the Halal requirements of the law. In the same regard, those that operate in countries in the European Union should conform to the existing laws banning the use of genetically modified meat products in their food. This was prime reason which forced McDonalds to eliminate beef, pork and Mutton out of India’s product menu. Other legal concepts like tax obligations, employment standards, and quality requirements are only a few of important elements on which the company has to take into consideration.

Otherwise, smooth operations shall be hard to achieve. As a certified fast food operator, there are many regulations and procedures that McDonalds should follow. McDonalds should protect its integrity and consumer confidence by ensuring all materials and process are as claimed or must followed. Other legal requirement that the business owner should follow as stipulated in laws are such as operating hours, business registration, tax requirement, labour and employment laws and quality & environment certification (such as ISO) in which the outlet has been certified.

The legal requirement is important because the offenders will be fined or have their business prohibited from operating which can be disastrous. The company should hire local counsels to deal with the legal conflicts in individual markets on which the company may encounter. This shall ensure the company that the lawyers that will handle their legal affairs are more versed with the legal regime that would ease out certain problems on their operations. Task 4 Impact of European Union’s Policies on McDonald The European Union (EU) is a unification of 27 member states united to create a political and economic community throughout Europe.

Though the idea of the EU might sound simple at the outset, the European Union has a rich history and a unique organization, both of which aid in its current success and its ability to fulfill its mission for the 21st Century. The European Union Policies have an impact on McDonald’s market environment. Economic and Financial Affairs (ECOFIN) Cooperation on economic and political matters is based on several forms of cooperation procedures. A fundamental principle when coordinating their economic policies is that Member States are responsible for their national economic policy.

As a result of the crisis, Member States have strengthened the coordination of economic policy. However, Member States continue to place strong emphasis on national sovereignty in economic matters while adhering to common rules. McDonalds Cooperation is registered under (ECOFIN) and has to seek for consultation or in co-decision with the European Council every year. Although each EU Member State is responsible for determining its own tax policy, the EU still cooperates on relevant aspects of taxation. This applies especially to policies which affect international trade and trade among the Member States.

The Member States therefore cooperate on certain aspects of taxation with cross-border effects. For instance, McDonalds have differentiated taxation rate in various country based on the country exchange rate. Employment, Social Policy, Health and Consumer Affairs (EPSCO) From the very beginning, the free movement for workers has been one of the basic rights within the European Community and this was the focal point of the first social and employment policy of the EU. The McDonald normally makes decisions in co-decision with the European Council.

This procedure applies for instance when the Council passes legislation about the working environment, conditions at work, and the free movement of workers of McDonalds. The EU has the mandate to compliment McDonald’s initiatives in the area of health for the purpose of protecting people from health threats and diseases, promoting healthy lifestyles and helping national authorities in the EU to cooperate on health issues. This is especially relevant when it comes to burgers of McDonalds which is high in cholesterol and may lead to heart disease.

Therefore, McDonalds have to modify the ingredient of the burgers. Competitiveness (COMPET) The McDonalds has to follow with industrial policy since the establishment of the EU. A milestone in the EU industrial policy is the establishment of the Single Market, which created a large home market for industry providing businesses with the opportunity to mass produce and profit from large-scale operation like McDonalds. Today, industrial policy is subject to the co-decision procedure, meaning that Competitiveness in business is legalistic. For an example, Burger King is legal competitor for McDonalds.

The European research and innovation cooperation and the close connection between research, innovation and education play a decisive role in securing future growth. Therefore, the EU gives high priority to this area and allocates considerable funds annually to finance the McDonalds research programmer. Agriculture and Fisheries (AGRI) Through the Common Agricultural Policy (CAP) the EU wants to ensure an economically viable agricultural sector that produces safe, high-quality food based on environmentally sustainable production. Moreover, the CAP contributes to ensuring good business and living conditions in rural areas.

By requiring farmers to deliver public goods in return for the financial support, the Common Agricultural Policy is to ensure that beneficiaries deliver public goods on a range of relevant aspects, such as an improved environment and climate, innovation, technology and food quality of McDonalds. EU consumers should be confident that the foods on the market are healthy, safe, of high quality and produced with respect for animal welfare. Improvements of food safety levels in the EU through the harmonization of standards will be of high importance of McDonalds.

EU countries have adopted common rules for McDonald’s hygiene and self-monitoring and common rules for authorities’ monitoring of the food industry. An EU inspectorate also monitors whether the McDonalds implement food legislation correctly. Task 5 Global Factors That Affect McDonalds Businesses are affected by an external environment as much as they are affected by the competitors. Global factors influencing business are legal, political, social, technological and economic. Understanding of these factors is important while developing a business strategy. Social factors

These factors are related to changes in social structures. These factors provide insights into behavior, tastes, and lifestyles patterns of a population. Buying patterns are greatly influenced by the changes in the structure of the population, and in consumer lifestyles. Age, gender, etc. all determine the buying patterns and understanding of such changes is critical for developing strategies which are in line with the market situations. In a global environment it is important that McDonald’s business strategies are designed keeping in mind the social and cultural differences that vary from country to country.

Consumer religion, language, lifestyle patterns are all important information for successful business management. Legal factors These factors that influence McDonalds business strategies are related to changes in government laws and regulations. For a successful business operation it is important that the businesses consider the legal issues involved in a particular situation and should have the capability to anticipate ways in which changes in laws will affect the way they must behave. Laws keep changing over a period of time.

From the point of view of business it is important that they are aware of these changes in the areas of consumer protection legislation, environmental legislation, health & safety and employment law, etc. Economic factors These factors involve changes in the global economy. A rise in living standards would ultimately imply an increase in demand for products thereby, providing greater opportunities for McDonald to make profits. An economy witnesses fluctuations in economic activities. This would imply that in case of a rise in economic activity the demand of the product will increase and hence the price will increase.

In case of reduction in demand the prices will go down. Business strategies should be developed keeping in mind these fluctuations. Other economic changes that affect business include changes in the interest rate, wage rates, and the rate of inflation. In case of low interest rates and increase in demand McDonald will be encouraged to expand and take risks. Therefore, business strategies should have room for such fluctuations. Political factors This refers to the changes in government and government policies. Political factors greatly influence the operation of McDonald. This has gained significant importance off late.

For example: McDonalds is operated in the European Union have to adopt directives and regulations created by the EU. The political arena has a huge influence upon the regulation of businesses, and the spending power of consumers and other businesses. Business must consider the stability of the political environment, government’s policy on the economy. Technological factors These factors greatly influence McDonald’s strategies as they provide opportunities for businesses to adopt new innovations, and inventions. This helps the McDonalds to reduce costs and develop new products.

With the advent of modern communication technologies, technological factors have gained great impetus in the business arena. Huge volumes of information can be securely shared by means of databases thereby enabling vast cost reductions, and improvements in service. Organizations need to consider the latest relevant technological advancements for their business and to stay competitive. Technology helps business to gain competitive advantage, and is a major driver of globalization. While designing the business strategies firms must consider if use of technology will allow the firm to manufacture products and services at a lower cost.

Firms can select new modes of distributions with the help of technology. It has become easier for companies to communicate with their customer in any part of the world. Conclusion From the beginning in 1948 as a fast food restaurant in Southern California, McDonalds grew by the end of the twentieth century into the world’s largest food service organization, having served up more than 100 billion hamburgers in half a century of operation. In conclusion, McDonalds are executing all these customers’ service improvement programs to constantly portraying itself as a friendly, healthy and quality food provider to customers.

McDonalds is trying to build long-term relationship with customers to ensure the retention rate in the market where competition is tough between all the fast food restaurant operators. The purpose of this paper work is to analyze McDonald’s with its competitor; Burger King, internal microenvironment, Pestle analyze, impact of EU Policies and global factors on McDonalds. Hereby, I strongly believe that I have reached your expectation on this case study. References McDonald (2012). A short history of McDonald. Available from: http://www. articlesbase. com/a-short-histoty-of-mcdonalds03920. tml [Accessed on 20/2/13] Frank Newman (2009). Burger King: A short Story. Available from: http://www. 21e5-11e4-dsas3-00134fascesds04. html. [Accessed on 20/2/13] Edita Novana (2003). McDonald’s Cooperation Analyze. Available from: http://www. mcdonalds. com-analyze-cooperate-profile-corp. [Accessed on 22/03/12] Edward Dean (2009). European Union Policies. Available from: http://www. ec. europa. eu/policies/index-en. html. [Accessed on 26/2/13] Anita Cameron (2011). Global Issues that affect Business. Available from: http://www. enziarticales. com/? Global-Issues-That-Affect-Business. html. [Accessed on 28/2/13]

Company and Product Background McDonald’s is one of the best known brands worldwide. McDonald’s first made its way to Malaysia in December 1980 when McDonald’s Corporation of USA issued the exclusive license to GOLDEN ARCHES RESTAURANTS SDN BHD or commonly known as McDonald’s Malaysia to operate McDonald’s restaurants in Malaysia. The entry of McDonald’s into Malaysia is through a Joint Venture agreement with Golden Arches Restaurants Sdn Bhd. McDonald’s Corporation of USA holds 49% equity. The remaining equity is held by local partners: 26% is held by Tan Sri Vincent Tan and 25% by Mohamed Shah Bin Tan Sri Abdul Kadir.

At the helm of Golden Arches Restaurants Sdn Bhd is Mohamed Shah Bin Tan Sri Abdul Kadir, the Managing Director / Joint Venture Partner. He took over the reins from Tan Sri Vincent Tan in 1987. Malaysian got their first taste of McDonald’s when McDonald’s Malaysia opened its first restaurant at Jalan Bukit Bintang, Kuala Lumpur on 29 April 1982. This restaurant is still in operation today and has undergone four renovations to maintain and keep with the changing trends. To date, Golden Arches Restaurants Sdn Bhd operates 194 restaurants located nationwide including Sabah, Sarawak, and Brunei.

McDonald’s Malaysia is currently expanding at an annual rate of approximately 10 to 20 restaurants. McDonald’s has created many job opportunities in Malaysia. McDonald’s Malaysia employs more than 8,000 local people with 120 support staff at its headquarters managing the day-to-day operations of the McDonald’s business. There is also a regional office in Penang and Johor Bahru. McDonald’s business actually began in 1940, with a restaurant opened by siblings Dick and Mac McDonald in San Bernardino, California.

Their introduction of the “Speedee Service System” in 1948 established the principles of the modern fast-food restaurant. The present corporation dates its founding to the opening of a franchised restaurant by Ray Kroc, in Des Plaines, Illinois on April 15, 1955, the ninth McDonald’s restaurant overall. Kroc later purchased the McDonald brothers’ equity in the company and led its worldwide expansion. McDonald’s grew into the largest restaurant organisation in the world. Today, there are more than 30,000 McDonald’s restaurants serving 47 million customers each day in over 100 countries.

Ray Kroc died in 1984 but his legacy is very much alive. With the successful expansion of McDonald’s into many international markets, the company has become a symbol of globalization and the spread of the American way of life. Product Product is anything that can be offered to a market for attention, acquisition, use or consumption that might satisfy a want or need. Product includes certain aspects such as variety, quality, design, features, brand name, packaging and services. These product attributes can be manipulated depending on what the target market wants.

McDonald’s predominantly sells hamburgers, various types of chicken sandwiches and products: French fries, soft drinks, breakfast items, and desserts. Each country implements the core McDonald’s menu: hamburger, cheeseburger, chicken nuggets, and french fries. McDonald’s has intentionally kept its product depth and product width limited. McDonald’s studied the behaviour of the Malaysian customer and provided a totally different menu as compared to its International offering. Being a Muslim-majority country, all McDonald’s in Malaysia are certified Halal.

Thus, pork products are not offered in McDonald’s Malaysia to satisfy Halal certification requirements. McDonalds continuously innovates its products according to the changing preferences and tastes of its customers. The recent example is the introduction of the Grilled Chicken Burger (GCB) and Prosperity Burger. Food quality is the key at McDonald’s. This means that McDonald’s take pride in the foods to serve for customers. McDonald’s seeks out fresh lettuce and tomatoes, quality buns and potatoes, pure ground beef, select poultry, fish and wholesome dairy product.

The potatoes are specially blanched and processed so that maximum nutrients are retained. Besides, upon arrival at the plant in Malaysia, the fish blocks are stored in a temperature-controlled environment to maintain their freshness. Freshly shredded lettuce, slivered onions and pickles are used in all burgers. Thus, McDonald’s has implemented rigorous food safety standards and established high food safety standards. So, there is nutrition information provided on web site for consumers and the aims of this information as regards quality product and menu selection.

In the 21st century, McDonald’s have continued to design and introduce new products and indeed new part menus, such as breakfast. The reasons that McDonald’s might have in introducing these products to satisfied their consumer’s needs and company strategies. The design of paper bag used by McDonald’s is made from grease resistant grass paper and pulp paper. The grease paper lines the interior, which allows for a grease less and environmentally friendly breakfast, lunch and dinner of McDonald’s sets. Next, McDonald’s is one of the most popular fast food restaurants whether domestic or abroad.

The feature of McDonald’s is McDonald’s thrives on the term “fast food” and offers a full menu 24 hours a day in some locations. For breakfast, the menu is filled with items like the Egg McMuffin, Sausage McMuffin with Egg, Egg McMuffin, Hotcakes, Hotcakes with Sausage and so on. For lunch, the menu is filled with McValue Lunch which offers from every Monday to Friday from 12 noon to 3 pm. McDonald’s uses packaging to ensure their food is fresh, hot, convenient and safe. The vast majority of McDonald’s is enjoyed without the use of cutlery.

Yet when menu items do require cutlery, McDonald’s will provide plastic cutlery to customers. The cups that are used for McDonald’s beverages are made from paper and have a coating to meet quality and food safety standards. This aim is to make sure that as much of McDonald packaging as possible is made from renewable resources. All McDonald bags, tray liners and cup carriers are made from 100 percent recycled paper. Packaging for hot foods such as Hamburgers, French Fries, Chicken McNuggets and Apple Pies, is made from 72 percent recycled paper.

The delivery packaging used for all buns, muffins, milkshake and sundae mix are returned to suppliers for reuse. This avoids the use of significant amounts of cardboard. All McDonald’s packaging carries an anti-littering symbol to actively encourage their customers to dispose of their litter responsibly. By replacing McDonald’s plastic salad containers with a paper card base they have reduced by nearly 69 tones the amount of plastic. McDonald’s provides service with convenience, cleanliness, delicious food and friendly service to their customers.

With free Wi-Fi, customers can access the Internet at no charge for customers who dine in McDonald’s. Thus, customers may enjoy foods but also searching information on internet. Besides, McDonald’s provides also an indoor and outdoor birthday party for those who wish to have a fun celebration on their birthday. Most of the McDonald’s restaurant provides 24 hours McDelivery service to satisfied customer needs. In addition, when several companies market a similar product, it is important that the brand name to be clearly seen on the packaging and easily recognizable.

McDonald has been put effort into making their brand name, logo, and packaging different style compared to their competitor. Therefore, McDonald menu item are different compared to Burger King’s, because McDonald have their specific Menu which provide McValue Lunch, Happy Meal, breakfast and so on. Such tactics are usually easy to recognize, and even if a customer is fooled once, it isn’t likely to happen a second time. Promotion A promotion mix is any form of communication a business or organization uses to inform, persuade, or remind people about its products.

Promotion mix consists of advertising, direct marketing, sales promotion, personal selling, and public relations. Using these tools, McDonald’s looks to localise its marketing communications strategy as it needs to consider the enormous range of cultural and other differences that it would be faced with in each country. It would be naive to ignore the various local markets and the factors which may affect the performance of its product in them. It also needs to analyse consumers’ attitudes towards its product, usage patterns and ethnic, moral and religious considerations in that environment.

Although the idea is to promote McDonald’s as a global image, McDonald’s focuses on the needs of the communities they are entering. In a communication context, the maxim “brand globally, advertise locally” is the McDonald’s promotional strategy. There are three main objectives of advertising for McDonald’s are to make people aware of an item, feel positive about it and remember it. The right message has to be communicated to the right audience through the right media. McDonald’s advertising is conducted on television, radio, in cinema, online, using poster sites and in press.

Television advertisement for the new Prosperity Burger for example explained the new choices and attempted to generate excitement for the product in conjunction with Chinese New Year. This may be supported by in store promotions to get people to try the product and a collectable promotional device to encourage them to keep buying the item. In press for example business magazines, television news reports, and newspaper articles provided free media coverage of the product launch and it became a significant news story.

The media gave McDonald’s franchise owners and corporate executives an opportunity to explain the reasoning behind the menu addition and to reassure their customers that McDonald’s was still in the hamburger business. In September 2003, McDonald’s introduced ” I’m lovin’ it ” as its first global advertising theme. Besides that, the advertisement capture the fun, youthful spirit and high energy that is the essence of the McDonald’s brand as well as the ba-da-ba-ba-ba™ audio trademark that has become recognized around the world. McDonald’s also ties in with sponsors. McDonald’s sponsors a vast array of sports.

Like example, during the summer 2008 Olympic Games in Beijing, McDonald’s was a cooperate sponsors. McDonald’s outlets offer its customers with various forms of incentives to buy its products. Using McDonald’s discount voucher or coupons that one can acquire after spending a particular amount over a period of fixed time, customers can enjoy the benefits of free meals or free add-ons. Additionally, they provide meal vouchers and exciting offers in their print ads, which the customer must cut and bring along when purchase it. Sales promotion efforts in McDonald’s involved free samples, launch parties, and store banners.

Today, McDonald’s patrons can enjoy close to 30% savings for selected products from its McValue Meal line-up between noon and 3pm everyday at almost all McDonald’s restaurants nationwide. In conjunction of the month of Ramadan, McDonald’s extended the time of McValue Lunch, normally is 12p. m-3p. m to 6p. m-9p. m. Extended period is to consider for the Muslims who fast during Ramadan and let them to have their dinner to break the day’s fast. The McDonald name the extend McValue Lunch called McValue Buka Puasa. Public Relations are also an important part of the McDonald’s marketing strategy.

The restaurant employees play a huge role in interacting with the public. On a day-to-day basis the employees commit themselves to customers and the customers’ feelings toward the brand. McDonald’s feels that before they communicate with their customers they need to be aware of what their competitors are communicating, so they can create a beneficial difference between themselves and the competitors. McDonald’s main idea of campaign is to connect with consumer all around the world. Some of the most famous marketing campaigns of McDonald’s are “You deserve a break today’, “Food, Folks and Fun”, “I’m Lovin’ It” and so on.

McDonald’s concentrates to help seek solutions for the problems facing children and families today. In Malaysia, the cornerstone of McDonald’s community relations programme is the Ronald McDonald House Charities Malaysia (RMHC Malaysia). It was established as a non-profit organization with the mission to create, find, and support programs that directly improve the health and well being of Malaysian Children through health, education, and welfare. McDonald’s Malaysia supports all administration and management costs, thus enabling RMHC Malaysia to use 100% of all donations received to assist Malaysian children in need.

RMHC Malaysia Coin Boxes are placed in every McDonald’s Malaysia restaurants to help raise funds for the organization. Every member of McDonald’s Malaysia is also involved in many local events in support of RMHC Malaysia. Price The customer’s perception of value is an important determinant of the price charged. Customers draw their own mental picture of what a product is worth. A product is more than a physical item, it also has psychological connotations for the customer. Price is the only marketing mix variable that can be altered quickly.

Price variables such as dealer price, retail price, discounts, allowances, and credit terms influence the development of marketing strategy, as price is a major factor that influences the assessment of value obtained by customer. McDonald’s strategy is to offer quality food quickly to customers at a good value. The pricing structure for McDonald’s over years has supported this message. The company strives to differentiate itself from other fast food restaurants by offering a variety of menu items that appeal to a variety of people from those who just want great hamburgers, to those who just want a quick healthy meal.

McDonald’s has a unique pricing strategy that falls solely on their many product lines. Their Value Meals fall into the category of Product Line Pricing, where there is a range of product or services the pricing reflect the benefits of parts of the range. For example, you can order a Double Cheeseburger Value meal that comes with a medium drink and fries for around RM9. 50. You can Upsize this meal to get a large drink and large fries for a little more money or you can go with another value meal that might include different items for different price.

The value pricing approach is used where external factors such as recession or increased competition force companies to provide ‘value’ products and services to retain sales. The most notable and recent example of this is McDonald’s McValue Meal. The McValue Meal was created because McDonald’s recognized that the economy was in a decline and that their competition was getting fiercer. The McValue Meal satisfies the current decreasing economy and has increased the pressure towards competitors. The introduction to the McValue Meal is by far the most economical product line that McDonald has ever offered.

You can get a number of products off of their menu for a few ringgits. It is efficient and practical. Geographical pricing is evident where there are variations in price in different parts of the world, country or state. For example rarity value, or where shipping costs increase price. In McDonald’s Malaysia, the price differs in East Malaysia, Langkawi, Genting Highland, KLIA, and LCC Terminal. If a market is close to perfect, in other words there is a lot of competition, this means that the participants are price takers and have no influence over the price.

In the case of McDonalds, if they raise their price above the market price then the consumer will simply take their business elsewhere as they can get the same product cheaper. Therefore McDonalds could concentrate their marketing on distinguishing their product from their competitors to make the consumer think that their competitors’ product is not as good. Alternatively they could reduce their price and compete that way instead. However sometimes price can act as a market indicator, that is if McDonalds burgers are cheaper than other burgers people might think they are poor quality and still buy from the competition. This branding means that the market is not perfect). So McDonalds would still need to aim their marketing at convincing the consumer that their product is good quality. McDonald’s is one of the first and most sort after in the fast food business and millions around the globe, especially the food lovers are passionate about it. McDonald’s offers discounts to its regular shoppers as a promotional strategy and along with that it is more cost-effective than dining at restaurants with waiters. Thus it helps in saving money which many consumers are concerned about when all the want is to fill up their appetite.

People can cut down their expenses because of the discounts offered. This is the reason for its growing popularity. Purchasers prefer burgers, fries and drinks when it comes with a better price discount availed through coupons. Discounts make the demand go higher and in buying more they save even more. McDonald’s coupons are sometimes given completely free. One can get them easily at any McDonald’s eatery without any money. The staff is informed about the discounts and can certainly give all the necessary details. Staffs are deliberately placed at shopping malls to give out these coupons, to areas where most people pass through.

Online websites are launched to provide the McDonald’s chits, letting one print the coupons out. Some use the internet and it is seen that many people are fond of these McDonald coupon websites. Loads of websites post their printable chits offering discount on food products at McDonald’s and also inform about the coupons and lists regularly. The most important reason for McDonald’s pricing flexibility is its well-established supply chain arrangement, which ensures efficiency and speed in distribution. Besides, huge increases in volume sales and food processing technology have been helping the company to offset its cost.

Place In the marketing mix of McDonald’s, the place is not just about the physical location or distribution points for products. It encompasses the management of a range of processes involved in bringing products to the end consumer. Place mix includes physical distribution, storage, inventory management, and channel selection. McDonalds is currently has over 33, 000 restaurant in 123 countries across the world. According to McDonald’s Malaysia website, there are 194 McDonald’s restaurants located nationwide. McDonald’s focuses on store placement and is always looking for the best locations.

This strategy created some weaknesses because it seemed that too many stores were put in some areas, cannibalizing sales from the other McDonald’s. The company has also made convenience a focus, not only through how fast it serves customers, but also in the location of its outlets. Most McDonald’s restaurants are small spaces, especially behind the counter in the food preparation area. These areas are designed for efficiency where the equipment is placed together to cut down on wasted movement and energy. The place mainly consists of the distribution channels.

It is important so that the product is available to the customer at the right place, at the right time and in the right quantity. There is a certain degree of fun and happiness that a customer feels each time he dines in McDonalds. There are certain value propositions that McDonalds offers to its customers based on their needs. McDonalds offers hygienic environment, good ambience and great service. Now McDonalds have also started giving internet facilities at their centre and they have been playing music through radio instead of the normal music.

There are certain dedicated areas for children where they can play while their parents can have some quality time together. In addition to its tradition rivals such as Burger King, KFC and Pizza Hut, the firm encounters new challenges. Burger King competes using a back to basics approach of quickly serving up burgers for time-pressed consumers. On the higher end, the KFC has become potent competitor in the quick service field, taking away customers from McDonalds’s. Perhaps in the new environment, fast, convenient service is no longer enough to distinguish the irm. At this time, a new critical success factor may be emerging: the need to create a rich and satisfying experience for consumers. This brings us to service and experience based competition which McDonald’s can use for competitive advantage against Burger King. Keeping in mind the demographics of the area, with urban professional class getting bigger and bigger, McDonalds also begin to adapt by offering more elegant looks in its layout design, offering special seating and Wi-Fi access to tech-savvy consumers who eat in the outlet.

It is for this overall “Food, Fun ; Folks” experience that customers pay a premium over the other competitors. McDonalds stress importance to meet customer’s expectation especially in term of time of delivery. In order to ensure fast delivery is through “Drive Thru” concept where customers can place order by driving through the counter with their car. This can save time from parking and waiting long queue for those who just want to take away the food. Customer‘s expectation is to able to get what they needs right on time at any place in convenience way and McDonalds is morphing from just a fast food restaurant to value service provider.

It is getting itself closer to the customer’s base so it can serve them better. For example fast ordering system like McDelivery will not only increase McDonald’s business opportunities to those who are reluctant to travel to its physical outlet but also will delight the customers with the fast response. This is the efforts by McDonalds to serve the hunger and needs of consumers anywhere, anytime whether it is rain or shine and day or night. In Malaysia, McDonalds started 24 hours concept in 2006 with 72 selected outlets or drive thru station that operate on 24 hours basis.

Logistics is the integration of the activities that procure materials, transform them into intermediate goods and final products through manufacturing and assembly, and deliver them to customers. For a firm as large as McDonald’s logistics is an area where proper planning results in increased efficiency. Purchasing is the most costly activity in most firms. Purchasing provides a major opportunity for management to reduce costs and increase contribution margins. Because the cost and quality of goods sold is directly related to the cost and quality of goods purchased, McDonald’s must examine a number of strategies for effective purchasing.

Because of the perishable nature of food, a system of just-in-time ordering and delivery is most effective for the company. For such a system to work, solid ties must be forged with a lot of suppliers. Ordering huge quantities of beef, chicken, and vegetables and expecting them to arrive at the shortest possible time requires coordination with capable suppliers. The company stands to gain the most with improvements in production – the actual preparation of food. Raw agricultural materials arriving at its commissary must be turned into buns, hamburger patties, french fries and McNuggets with minimal waste.

It must then carry over this practice of efficiency into its outlets. Conclusion Marketing mix is the combination of four elements, called the four P’s (Product, Price, Promotion, and Place), that every company has the option of adding, subtracting, or modifying in order to create a desired marketing strategy. McDonald’s marketing mix is strategic because of the diverse approaches that are used. First, in identifying the four P’s of marketing, McDonald’s is very careful in making decisions that affect each area or how each area affects the other.

McDonald’s is concerned about how the firm will fulfil the needs and wants of its customers and in the activities associated with maintain the relationships with its stakeholders. McDonald’s stakeholders include customers, franchisees, suppliers, employees, and the local communities surrounding them. McDonald’s has shown care for customers through the decisions to add more healthful foods to the menus, by changing how products are packaged or how foods are prepared, and by philanthropic contributions and sponsorships.

Local adaptation, no doubt, has contributed to McDonald’s business growth in Malaysia. The restaurant has developed competitive advantages in the industry of serving quality fast food as low as cost. In addition to these decisions, the development of the Golden Arches or Ronald McDonald has provided consumers with memorable icons that are associated with quality, service, and value. McDonald’s faces some difficult challenges in moving away from the fast food king to a more conscious provider for customers who care about what they at. The keys to its future success will be maintaining its core strengths, an unwavering focus on quality and consistency while carefully experimenting with new options. The company’s environment efforts, while important, should not overshadow its marketing initiatives. Though there are many opportunities for this fast food giant, McDonald’s must keep the strategic nature of its marketing efforts to stay on top and provide what customers want. McDonald’s uses market research information to build a marketing strategy.

All parts of its organisation then have to work together to ensure that the strategy reaches its objectives. Once the marketing strategy is in place, various responsibilities are given to different individuals so that the plan can be implemented. Systems are put in place to obtain market feedback which measure success against short-term targets. McDonald’s has to ensure that this is done within the confines of a tightly controlled, finite marketing budget. Thus, the four P’s of marketing provide a good starting point for consideration of the requirements of strategy implementation in the marketing function.

How McDonald’s Change Their Customer Perspective and Increase Their Sales with Green Marketing The green issue has became a global issue since year 1990s, peak in year 2000s. In business, it can drive people perspective to choose which brand was good or bad. McDonald’s probably is one of the company that realize this issue is very important for their business in this century. McDonald’s is the biggest fast food chain in the world with more than 32,000 outlets in 117 countries. The company has employed more than 1. 7 million people. Last year, they’ve made 1. 2 bn out from 6. 1 bn.

For years, many critics came up against McDonald’s about how bad they treat world environment and questioning how far they care about people healths, especially on obesity. The most famous “attack” to this fast food company probably was a documentary film that tells a people who eat Mcdonald’s meals for a month would hasten his death. McDonald’s also considered to have responbility of 28% waste package (littering) in UK. Public suggested the company to more persuade their customers not to do littering. And also, public critics McDonald’s happy meal which caused early obesity to child.

Those critics had succeed to change people perspective, in year 2000, their income declined with some outlets shut as their new record. Started in 2000s, McDonald’s is fighting back, massively and quietly counter the critics with green marketing. It is not only to increase the company sales, but more important to change the way customers think about McDonald’s, their perspective. But how they do it? McDonald’s is not sustainable company from the beginning, they has core DNA to create delicious food, fatty foods, and sugary foods.

They must be careful to take an action, the green strategy not only have to change customers willing to buy, but also it could reduce cost and generate more valuable profit. McDonald’s is aiming to blow up their green with five criteria, there are nutrition and well-being, sustainable supply chain, environmental responbility, employee experience, and community. They started to create a new logo –switching their traditional red background with the deep green one- to promote a eco-friendlier image.

McDonald’s has done a lot of things in order to prove their environmental responbility to their customers, especially by reduce the energy they used. In Germany, at less 100 McDonald’s restaurant would use the green logo by the end of year 2009. And also, some restaurant in Great Britain and France would too. They started to use eco-friendly package – 80 percent of their package was made of renewable resources-. They change white napkins with plain brown, which saves 1. 3 million dollars annualy, while reducing energy, woods and water use.

In France, some restaurants has made an innovation to use eco-friendly sofware that can reduce electricity usage by 11%. In Sweden, they use CO2 detector in their restaurants to adjust ventilation, which is reduce the usage of electricity by 15% anually. Various anti-littering campaign is spread to many countries, such as Portugal, UK, France, Switzerland, Australia, and others countries. From their menu, they change a bit in the name of their customer health, they reduce French fries size, adding fruits to its food, bring more healthier salad, less sugar drinks and foods, even low fat foods.

Moreover, in Germany, there are some restaurants that provide no burgers and sells salad at just 7 euros, they can choose 5 traditional salads and mix it. Another weapons is sells coffee –sustainbly grown coffee and organic milk- with brand McCafe, while they offering low-calorie foods in the other sides. This strategy was made a significant growth, in Germany there are currently 1386 reaturants with 737 integrated McCafe inside, encouraged by a worlwide revenues of 23. 5 billions dollars.

They also made a contribution to the local communities, all supply of each restaurants is provided by the local farmers in that city, except their global sponsor drinks, Coca-Cola. They also prove that they care about woman livings, 28. 1% of worldwide top management (VP and Ups) are women, while 50% Company Owned Restaurant Managers are women too. The last but not least, more than 30 countries recognises McDonald’s as great place to work. All of green things above was successfully delivered to customers by various medias, it proved by the increasing growth 13% sales in year 2011 from year 2008.

And also, the legendary Big Mac sales rose 10 percent last year, helping keep the company stock price to nearly $100 a share. In the other hand, the advertising budget has been estimated to exceed $2 billion. It shows that McDonald’s has successfully came back to winning by counter critics with the right strategic green marketing. They do the strategy without change the “fastfood” image, but they do with showing their will and contribution to the environment. Finally, it can change human perspective and willing to buy with the increasing sales as the success parameter.

Sources Birkner, Christine. 2012. McDonald’s Scores Itself on Sustainability: Will Consumers Be ‘Lovin’ It’?. http://www. marketingpower. com/ResourceLibrary/Documents/newsletters/mne/2012/1/mne_mcdonalds_sustainability. pdf. September 3rd 2012. O Brien, Keith. 2012. How McDonald’s Came Back Bigger Than Ever. http://www. nytimes. com/2012/05/06/magazine/how-mcdonalds-came-back-bigger-than-ever. html? _r=1pagewanted=all&&pagewanted=all. September 3rd 2012 Environmental Leader. 2012.

McDonald’s Counters Criticism With Green Marketing Effort. http://www. environmentalleader. com/2009/05/19/mcdonalds-serves-up-green-practices/. September 3rd 2012. Salisbury, Peter. 2011. Behind the Brand: McDonald’s. http://www. theecologist. org/green_green_living/behind_the_label/941743/behind_the_brand_mcdonalds. html. September 3rd 2012 Laura, Nerdy. 2011. McDonald’s going green – I’m lovin’ it. …?. http://businessnerds. wordpress. com/2011/05/29/mcdonald%E2%80%99s-going-green-%E2%80%93-i%E2%80%99m-lovin%E2%80%99-it/. September 3rd 2012.

1. Which characteristics of McDonald’s production system have been most important in building its record of success and growth? McDonald’s operating system is built on the characteristics of guaranteeing uniform quality and service and maintaining it remarkably consistent across all units. It mainly focused on factors such as providing customers with pleasant experience, fast service and tasty and inexpensive food. McDonald’s took several measures to ascertain consistency across units. In their ‘Speedee Service System’, they standardized their preparations methods by employing a combination of product specifications and customized equipment.

While the competitors entered McDonald’s market and tried to emulate its product preparation and franchise recruiting process, McDonald’s sought out to build special set of relationships with its suppliers and its franchises. McDonald’s operating system primarily concentrated on four areas: 1. Improving the product 2. Developing outstanding supplier relationships 3. Improving equipment 4. Training and monitoring franchises They paid a great attention to detail in the pursuit of improving the product. Product improvement was a revolutionary innovation on McDonald’s operation strategy.

McDonald’s highly monitored the way farmers grew potatoes and ranchers raised beef, introduced alterations in both potato and meat processing and invented efficient cooking equipment to meet its tailored needs. Restricting itself to relatively small number of menu items helped McDonald’s spend time and effort in improving the processes, monitor their supplies and maintain consistency. McDonald’s production system heavily adhered to the standards mentioned in its operation manual, be it the way the hamburgers were made or the French fries were made.

To ensure quality, products were held in transfer bins no more than ten minutes. McDonald’s was more concerned about quality. They never bargained with the supplier for the price, rather they believed in supplier making fair profits and letting the suppliers grow alongside of McDonald’s. McDonald’s meticulous attention to detail was driven by its practice of seeking to study every component of its operation to learn what worked and what failed. These studies and their results were used continuously to revise and improve and do things in better ways. . What are the primary new challenges McDonald’s faces in the 1990s? Despite the fact that McDonald’s provided quick and consistent service to its customers, during the 1990s its sales per unit had slowed down. They were facing some vexing challenges such as growing need for flexibility and product variety. Although McDonald’s expanded in the international market, its US quick-service market went down drastically. It had 2500 franchises and 8814 restaurants and accounted for 60% of the company’s revenues and yet it needed to be supported.

The primary challenges that McDonald’s faced during the 1990’s include: 1. Health and nutrition awareness amongst consumers 2. Recession attributing to reduced consumer purchasing power 3. Competitors in fast food and dine-in services 4. Competitors’ variety of menu and products 5. Competitors low pricing strategy 6. McDonald’s brand image One of the reasons for this decline in the US quick-service market was because of demographic trends. Consumers were becoming more health conscious and aware of nutritional and dietary options while not compromising on taste.

The eating habits amongst the youth and the older generations have undergone significant changes. Consumers tend to be picky in determining their daily consumptions. They have also expressed their dissatisfaction on the quality of food which was being served by McDonald’s. It is an obvious fact that burgers comprise of fat and oil and is bound to affect one’s health but their conscience as well. Besides health reasons, many Americans’ eating habits have changed towards the concept of eating out.

Recession during that era has taken a heavy toll on many consumers causing them to be thrifty and have returned to home cooked meal instead. While this was not universal, it contributed to the decline in per unit sale. One other major reason for the decline in McDonald’s per unit sales was the entry of specialist competitors. These competitors were in both drive-through and dine-in services. Sonic and Rally’s were one example of competitors in hamburger chain that offered drive-through service only and were specialized in delivering burgers in much faster fashion.

While on the other hand, competitors like Chili’s and Olive Garden were family-style restaurants and they focused primarily on targeting middle aged consumers (aged 40 to 60) amongst whom casual dining was becoming more popular. The competitors also catered to consumers who were in pursuit of variety of food. Chili’s and Olive Garden offered a wide variety of menu items while McDonald’s focused on having a limited menu choices while controlling the quality and consistency. Furthermore, the competitors provided a variety of menu items and yet prices remained competitive when compared to McDonald’s.

Competitors like Taco Bell shifted it kitchen operations to external suppliers, reduced kitchen space in outlets and thus used cost based strategy (low prices) to compete with McDonalds. One other reason for decline in sales was McDonald’s brand image itself. While responding to the prevailing market conditions and consumer needs, McDonald’s has introduced new menu items including pizzas. However, McDonald’s being practically synonymous with burgers, consumers never thought of McDonald’s when they wanted to eat pizza.

McDonald’s not only had to extend its own brand image that it has built over a p of several years, it also had to challenge established competitors and their reputation. 3. How would you adapt the system to accommodate these changes in the U. S.? Adapting the system to accommodate the changes in US can be explained using Porter’s five forces. Threat of Competitors (traditional rivalry) In the current US fast food industry, there are a number of players in the market, McDonald’s being the largest. The competitors are majorly large corporations running across various locations and they compete with McDonald’s by huge marketing strategies.

While the threat from competitors is high in terms of variety of food and location, McDonald’s can combat the competitors rivalry by focusing on its outlet and franchise locations and by diversifying their menu to meet the consumer preferences Threat of New Entrants Entry barriers are very few into the fast food industry and there are new entrants of differing magnitudes emerging all the time. Only the economies of scale and distribution access seem to be the major barriers and hence there is a likelihood of more entrants into the market. This in turn is increasing the threat from competitors.

McDonald’s being the largest in the fast food industry in the US, it should use its brand power and influences to stop new entrants grow big in this industry. Doing this would give McDonald’s a competitive advantage over the new entrants and thus help survive in the industry Threat from Substitutes Substitutes for fast food industry players are the dine-in services, caterers and ready-to-eat/heat-and-eat food products available in super markets. The threat from substitutes is high when: 1. Consumer switching costs are low 2. Substitute products are cheaper 3.

Substitute product has equal or superior quality when compared to the industry product Since the fast food industry currently has a variety of substitutes, the threat from substitutes is high. McDonald’s can gain competitive advantage over its substitutes by combating the aforementioned three issues and also focusing on marketing its product as healthy and nutritious and increasing the awareness amongst its consumers. Power of Supplier Given the massive size of McDonald’s, it has the advantage of driving the lower prices of raw materials from suppliers due to economies of scale.

The power is less with the supplier since no supplier wants to lose McDonald’s from their customers list. If McDonald’s plans to diversify its menu, it should ensure that the suppliers are capable of supplying a large scale material in order to cater its consumer need in US market. Power of Buyer In order to meet its consumer needs in the US market and maintain a high consumer satisfaction rate, McDonald’s has to do things that will safeguard its consumer loyalty. To achieve this, McDonald’s has to come up with variety in its products and low prices consistently while not compromising on quality.

Product differentiation is very important in the fast food industry to suppress competition and withstand the industry pressure. Buyer bargaining power also depends on the quality of products the industry provides and hence McDonald’s has to ensure that the quality is not compromised. Apart from the aforementioned factors, McDonald’s is also facing a high employee turnover rate. They have very low paid, non-union, part time jobs with low rights and conditions. This is causing the employees leave the organization.

This high attrition rate is causing huge costs to McDonald’s since the company spends a huge amount of money in training the employees and the franchises. To combat this issue of high employee attrition, McDonald’s should restructure the pay and incentive system and be more flexible towards the employees. 4. How can McDonalds lay the basis for future growth? McDonald’s has always been focusing on the quality of service, be it consistent or fast, ever since its inception. This has been a remarkably distinguishing factor for McDonald’s to reach apex in the fast-food industry.

McDonald’s has already introduced menu diversification options. Instead of making this diversification across all geographies, it should first implement and test the strategy in various small locations. Based on the success rate of this change, it should spread the diversified menu to all of its outlets and franchises. Also, while introducing new menu items, it should do a careful planning of targeting a new market segment (children) and their preferences based on the demography in which the change is introduced.

Since there in a tremendous increase in consumer awareness about the nutritional and dietary options, McDonald’s should now expand its menu to contain more nutritional items. Introducing a whole new line of healthy items will help retain consumer satisfaction and loyalty while allowing competing with the market. When new menu items are introduced, consumer feedback should be taken to evaluate if the menu expansion was good or bad. Consumers should be encouraged to give feedback by awarding surprise rewards.

This gives motivation to the consumer and would also help the company in making the right decisions. However, while introducing new menu items, McDonald’s has to ensure to be first in the market to introduce a new variety of menu items and be the trend-setter. It has to formulate strategies to be able to be first in the marketplace rather than being a follower. Furthermore, McDonald’s can take the advantage of organic food industry popularity to build its entire new set of menu items. Another issue that McDonald’s should focus on is changing the consumers’ perception about McDonald’s.

New marketing campaigns have to be launched to highlight the improved quality, service, and cleanliness and to address the complaints about bad service. Additionally, McDonald’s should set up an internal health inspection team to do investigate quality of their products and address issues related to consumer perception. For example, it is generally known that burgers in McDonald’s are “junk” food and that stigma affects reputation of McDonald’s. By engaging these inspection teams, McDonald’s should erode this consumer perception to survive the competition in fast food industry.

McDonald’s was founded in San Bernardino, CA in the year 1940 by Richard and Maurice McDonald. The two brothers sold their fast food restaurant to a milk shake salesman named Ray Kroc in the year of 1961. Kroc believed in conformity, uniformity and the ethic of mass production. Following the ethic of mass production Kroc began to use frozen beef patties and genetically-modified potatoes to ensure uniform taste.

McDonald’s also pays minimum wage to their workers, who essentially do assembly line, factory-type work. If you were to reclassify the work they do to factory work that would “add about 3. 5 million manufacturing jobs to the U. S. economy, at a time when such jobs are rapidly being exported overseas. From a statistical point of view, it would make the U. S. seem like an industrial powerhouse once again, instead of an ageing superpower threatened by low-cost competitors” (Schlosser, 2004).

Despite the objections of McDonald’s, the term “McJob” was added to Merriam-Webster’s Collegiate Dictionary in 2003. The word “McJob” means a low-paying job that requires little skill and provides little opportunity for advancement. McDonald’s is the world’s largest distributor of toys, which it includes with kids meals which were introduced in June 1979. It has been alleged that the use of popular toys encourages children to eat more McDonald’s food, thereby contributing to many children’s health problems, including a rise in obesity.

Many parents weren’t happy and said that giving toys with children’s meals circumvents parental control and teaches children unhealthy eating habits. One mother sued McDonald’s and went on to say, “I object to the fact that McDonald’s is getting into my kids’ heads without my permission and actually changing what my kids want to eat”. McDonald’s now features fruits, salad, and healthier drinks but continues to give out toys. This was not the first time McDonald’s has been sued. McDonald’s has been sued multiple times for health related issues.

They have also been fined twice for breaking child labor laws. In 2001 the company was fined 12,400 British Pounds Sterling by British magistrates for illegally employing and over-working child labor in one of its London restaurants. This is thought to be one of the largest fines imposed on a company for breaking laws relating to child working conditions. In April 2007 in Perth, Western Australia, McDonald’s pleaded guilty to five charges relating to the employment of children under the age of 15 in one of its outlets and was fined $8,000 AUD.

Still, McDonald’s has a few good ethics. They own the Ronald McDonald House Charities, an organization that helps families with critically ill or injured children who must travel to fulfill their healthcare needs. They also host an annual event at McDonald’s called “McHappy Day” where a percentage of the day’s sales go to charities. McDonald’s also tries to help the environment by using biomass power plants to cut its waste and carbon footprint in half where biomass power plants are available.

They’ve also reduced the amount of packing for their food by 46% since the year 1970. Overall, weight reductions in packaging and products, as well as the increased usage of bulk packaging ultimately decreased packaging by 24 million pounds annually.

References

1. http://en. wikipedia. org/wiki/Happy_Meal
2. http://www. neumann. edu/academics/divisions/business/journal/review_08/gibison. pdf
3. http://en. wikipedia. org/wiki/Ray_Kroc#McDonald. 27s
4. http://www. guardian. co. uk/business/2010/dec/19/mcdonalds-happy-meals-sued-california
5. http://en. wikipedia. org/wiki/McDonald’s#Criticism

INTRODUCTION 1. 1 Background KFC According to the information, “Kentucky Fried Chicken (KFC) is a chain of fast food restaurant based in Louisville, Kentucky, United States that selling Kentucky Fried Chicken around the world. ” It had been rated at number 60 as the world most famous brand by BusinessWeek. For KFC, fried chickens was the food they primary focus to sells. “Their basic products included chicken pieces, salads, sandwiches, desserts and some roasted and grilled chicken cuisines too. ” Besides that, the beef and pork based products also offered by KFC outside the USA.

The first idea of KFC’s fried chicken actually is in 1930 but it was only founded in 1952 by Colonel Harland Sanders, who was born on September 9, 1980 in Indiana, America and he was the man who developed the secret recipe which blends of 11 herbs and spices for making Kentucky Fried Chicken and this secret recipe still used today. Nowadays, KFC has more than 15,000 outlets in 105 countries around the world. In 1973, the first KFC restaurant in Malaysia was opened at Jalan Tunku Abdul Rahman, Kuala Lumpur. In overall, KFC currently has 445 outlets in Malaysia and it had become the largest fast food chain in Malaysia.

McDonald’s According to the information, McDonald’s is the world’s largest chain of fast food restaurant based in Des Plaines, Illinois in 1955 to today that selling hamburgers around the world and it had been rated at number 9 as the world most famous brand by BusinessWeek. “For McDonald’s, foods that primarily sells by them are hamburgers, cheeseburgers, chicken, French fries, breakfast items, soft drinks, shakes and desserts. ” But nowadays, due to the changing of customers’ tastes, the restaurant menu which are included salads, smoothies and fruits have been expanded by McDonald’s company.

The founder of McDonald’s is Ray Kroc although the first concept of McDonald’s was actually introduced by sibling Dick and Mac McDonald and they built the first McDonald’s restaurant in 1940 in San Bernardino, California. In 1954, Mr. Ray Kroc acquired franchising rights from Dick and Mac McDonald and a McDonald’s franchise was opened on 15 April, 1955 and later bought out the McDonald’s share of the McDonald brothers. The McDonald’s Corporation was then founded in 1955 and it was expanded by Ray Kroc. Nowadays, McDonald’s has more than 31,000 outlets in 109 countries around the world.

In 29 April 1982, the first McDonald’s restaurant in Malaysia was opened at Jalan Bukit Bintang, Kuala Lumpur. In overall, McDonald’s currently has 200 outlets and about 20 to 25 outlets are being expanded annually. 1. 2 Problem This report has been written to compare the customer service of fast food restaurants in Malaysia: KFC versus McDonald’s. Nowadays, increasing competitive challenges have been faced by the fast food restaurants in Malaysia such as restaurants KFC and McDonald’s. In order to satisfy the customers at a fast food restaurant, excellent customer service should be provided to customers by the management and the staff.

Because beside the food quality, the standardize customer service that provided by fast food restaurants is expected by the customers. Currently, customer service is one of the factors that determine the customer satisfaction and it will directly affect the business of their fast food restaurants. However, recently the fast food restaurants are lack of customer service. The standardization in franchising business format does not ensure the standardization of customer service within the fast food restaurants due to some outlets are not able to follow up the same standards for customer service in franchise system. . 3 Purposes The purposes of this report are firstly to investigate the customer satisfaction with the customer service that is provided by KFC versus McDonald’s and secondly, to find out why students from Tar College prefer McDonald’s than KFC. Lastly, is to find out what aspects of customer service that provided by KFC and McDonald’s affect their business. 1. 4 Methods 1. 4. 1 The Sample The sample size of 30 was randomly selected, between the age of 18 to 22 from different gender. They are all students from School of Business Studies (Banking and Finance), Tar College KL Main Campus. 1. 4. 2 Data Collection ) Survey 30 sets of questionnaires were distributed as a source of primary data at Tar College KL Main Campus. These questionnaires consisted of 8 questions which focused on the customer satisfaction with the customer service that is provided by KFC versus McDonald’s, the reasons why students from Tar College prefer McDonald’s than KFC and what aspects of customer service that provided by KFC and McDonald’s affect their business. A clean copy of the questionnaire can be found in Appendix A. b) Internet Search The source of secondary data is the information obtained from the internet research.

Information was gathered on the customer service that is provided by KFC and McDonald’s from the Internet. Various websites of KFC and McDonald’s were browsed through for this research. 1. 5 Scope This report investigates the customer service that provided by KFC and McDonald’s only. Other fast food restaurants are not included in this report. It focuses on the customer satisfaction with the customer service that was provided by KFC versus McDonald’s, the reasons why students from Tar College preferred McDonald’s than KFC and what aspects of customer service that provided by KFC and McDonald’s affect their business.

The survey questions were distributed on 28 May 2012 at Tar College and collected back after the respondents finished their survey and only had 30 Tar College KL Main Campus students of School of Business Studies (Banking and Finance) were surveyed for this report. 2. FINDINGS 2. 1 Findings from Survey / Questionnaire Pie Chart 1. 1 The chart shows the frequency of TARC students go to fast food restaurant. 30 respondents were surveyed. As shown in the pie chart 1. , there is a total of 12 respondents who were going to the fast food restaurant once every two weeks, which occupied 40% of the 30 respondents. There are also 8 respondents which equal to 27% of the 30 respondents are going to the fast food restaurant once a month. Besides this, there are 6 respondents, 20% of the 30 respondents go to fast food restaurant once a week. For the remaining 4 respondents, there are 3 respondents go to fast food restaurant less than once a month and only 1 respondent go to fast food restaurant for two or three times a week.

This pie chart shows that, most of the TARC students are going to fast food restaurant once every two weeks as it occupied 40% of the 30 respondents and the least of the TARC students are going to fast food restaurant for two or three times a week as it only occupied 3% of the 30 respondents. Pie Chart 1. 2 The chart shows the fast food restaurants that TARC students prefer to go. 30 respondents are being selected for a survey of either KFC or McDonald’s they will prefer to go. As shown in the pie chart 1. 2, there are 26 respondents which occupied a large portion of 87% among the 30 respondents are prefer to go to McDonald’s.

Whereas the remaining of 4 respondents which only occupied a small portion of 13% among the 30 respondents is prefer to go to KFC. There are large portions of TARC students prefer to go to McDonald’s rather than KFC. These may be affected by the customer services, prices and the set menu provided by the McDonald’s are better than KFC. Bar Chart 1. 1 The chart shows the customer satisfaction with the customer service that is provided by KFC versus McDonald’s. 30 respondents were surveyed. As shown in the bar chart 1. 1, there is a total of 17 respondents who satisfied with the customer service that is provided by KFC.

Whereas there is a total of 13 respondents who are not satisfed with the customer that is provided by KFC. On the other hand, there is a total of 26 respondents who are satisfied with customer service that is provided by McDonald’s and the other 4 respondents are not satisfied with customer service that is provided by McDonald’s. This bar chart shows that, customer service provided by McDonald’s are more satisfied by the respondents. KFCMcDonald’s Poor AverageGoodPoorAverageGood My food order was correct and complete1161311316 Waiting time after ordering food12631209 Staff are patient when taking orders32431254

Communication skills421511910 Telephone services skills72032226 Staff are friendly and polite520531710 Sauces.. untenils.. 714931710 Table 1. 1 Bar Chart 1. 2 Bar Chart 1. 3 Bar chart 1. 2 and 1. 3 shows that, for KFC and McDonald’s, we focus on seven interesting customer services which were responded well from our 30 respondents in TAR College through the questionnaire survey which included whether the food was correct and complete, waiting time after ordering food, staffs are patient when taking food, communication skills, telephone service skills, staff are friendly and polite, and availability of sauces, tissues, and utensils.

According to the survey, the questions were focused on the customer services for both KFC and McDonald’s. From the respondents view, we found that the consumers are more satisfied with the ordering service in McDonald’s compared to KFC. Ordering service is important to maintain the business because if the food order was wrong and incomplete, this may cause consumer resentful with the service that provide by the fast food restaurant.

Next, the waiting time after service play an important role in the fast food restaurant and this is the reason why consumers like to have their meal in fast food restaurant because usually most of them are students or workers who are in the hurry so they need to get their meal in the shortest time. Based on the respondent view, the waiting time after ordering food in McDonald’s is faster and shorter than KFC, this show that respondents are more preferred to have their meal in McDonald’s.

Moreover, the attitude of the staff when taking order from the consumer will affect the reputation of the restaurant. Due to the survey, staff from McDonald’s are more patient when taking order than staff from KFC. In addition, Malaysia was a multi-racial country, so the communication skills are important when communicate with their customer. The respondents from survey feel that communication skills of McDonald’s are better than KFC since the McDonald’s can speaks in multiple languages. Nowadays, apart from drive hrough and having meal in restaurant, most of the fast food restaurants are provided telephone service for consumer to ordering food. For the staff who responsible to the telephone service, they need to answering the phone with the polite attitude and the speed of the staff speaking was important to ensure that the customer can listen clearly and understand. According the result of survey, respondents are more likely to use the telephone service of McDonald’s compared to KFC. Furthermore, friendly and polite staffs are according to the staffs who work in a fast food restaurants such as McDonald’s and KFC.

This refers to their respond on how to serve their customer, a staff should be able to respond well such as the way they welcome their customers, taking order and answer customer question. When a staff from a particular fast food restaurant such as McDonald’s and KFC performs nicely and in a courteous behavior, this leads to frequent visit of the customers to the particular fast food restaurant. As a result from survey, we found that respondents are more preffered to McDonald’s customer service compared to KFC.

Lastly, the avaibility of sauces, tissue and utensils also act an important role in a fast food restaurants because some of the customer would like to have some sauces to favor their food and they may need some tissue after taking meal. Refer to the survey, most of the respondents are more satisfied with the facilities of the McDonald’s compared to KFC. In short, the customer services of the McDonalds are more prefered by customers if compared to KFC. Bar Chart 1. 4 The chart shows the methods that are suitable for KFC and McDonald’s to improve their customer services. 0 respondents were based on their opinion and preferences to respond how to improve the customer services for KFC and McDonald’s. Based on the survey, 17 out of 30 respondents had been choose to train the staff to be polite always for KFC and 8 respondents for McDonald’s. On the other hand, 15 of respondents had responded to train their staff to use language to promote a good customer services and 16 respondents had choose it for McDonald’s. 9 respondents had responded to train their staff to deal with customers complaints for KFC and 8 respondents for McDonald’s.

There are 20 respondents had choose to increase the speed of services for both KFC and McDonald’s. 8 respondents responded that communicate more with customer are suitable in to improve customer services for KFC and 9 respondents for McDonalds. KFC and McDonald’s both have 11 respondents respond on upgrade the staff appearance and image. Upgrade of delivery services for KFC have 12 respondents and for McDonald’s have 13 respondents. 8 respondents had responded that KFC need to upgrade their telephone services and 15 respondents responded that McDonald’s need to do so to improve their customer services.

It is highly likely most of the respondents responded that the KFC and McDonald’s need to increase the speed of services because it was probably due to the staff served the staff slowly and the waiting time is long. For KFC, there are very least respondents unsatisfied with the telephone services skills and for McDonald’s there are only 8 respondents unsatisfied with the staff manners and attitude. As a conclusion, KFC and McDonald’s and should focus more on the speed of their services and the staff appearance and image so that it can help to improve their services. . 2 Findings from the internet From our secondary research, we found that the customer service provided by McDonald’s is better than KFC. Due to the good customer service provided by McDonald’s, many customers prefer McDonald’s to KFC. For KFC, we found that there is a declining service standards. A lots of complaint about KFC. Our research shows that, many customers end up with disappointed with the customer service provided by KFC after they visit it. Many customers complainted that the staff are impatient when taking their orders and poor manners.

One of the examples is “on 6 February, 2012 an serious incident was happened at KFC i-city, Shah Alam Malaysia. The KFC’s staff was fighting and hitting their customer. ” Customers are paid to eat at KFC, no one deserve to be treated like that. Besides that, the food that customers orders was not correct. For example, “a customer ordered a bucket meal: 5 grilled and 5 original but when he opened the bucket, his half-grilled half-original recipe order was replaced by an all-grilled bucket. ” These all indicated the bad customer service from KFC so customers less prefers go to KFC than McDonald’s.

In contrast, McDonald’s less likely to have these kinds of problems. McDonald’s always provide good service based on standardization in franchising business format to their customers. So customers will prefers go to McDonald’s than KFC. 3. CONCLUSION In conclusion, most of the respondents are prefer McDonald’s instead of KFC. As mentioned above, the reasons that respondents prefer McDonald’s from a brief view are the customer services provided such as staff attitude, communication skills, telephone service skills, availability of utensils is better than KFC as McDonald’s is compare with KFC.

Based on our research, it is shown that both McDonald’s and KFC have their own customer services such as Drive-Thru services, delivery services, telephone services, staff attitude and others which can attracting customers. Both fast food restaurants are always maintained and improve their quality and services provided which can make sure their services are preferred and satisfied by everyone. This can maintain their old customers and also attracted some new customers. Most of the TARC students are prefer to go McDonald’s by referring the questionnaires.

According to our research, KFC should improve their customer services until they can achieve the similar popularity level just like McDonald’s, so that they could be the preferable fast food restaurant. Furthermore, customers can always give some opinion, suggestions or comments on their homepage or through the comment box to make sure that both McDonald’s and KFC understand the needs of the customers. Both McDonald’s and KFC also can improve their quality of products and customer services so that customers can satisfy with the services provided. 4. RECOMMENDATIONS

According to the conclusion, we are recommend that the customer services for both fast food restaurants, McDonald’s and KFC which were not satisfied by customers should be improved to achieve a higher level or more preferable and satisfied by customers. For McDonald’s, we are recommend that the communication skill of the staff should improve by training their staff to use language that promotes good customer services based on the respondents view. The McDonald’s staff should not talk too fast or too slow to the customers so that the customers can hear clearly what they talking about.

Moreover, McDonald’s should communicate more with their customers such as distribute a survey and request a feedback. Through this method, McDonald’s can know the needs and the satisfaction of their customers about their products and services so that they can improve their products and services. Furthermore, McDonald’s can upgrade their delivery services such as delivery within 15minutes and maintain the food freshness. The delivery staff must drive carefully to avoid accident so that the customers can trust on them.

Lastly, McDonald’s also can upgrade their telephone service skills. When the customers call for the delivery, the staff must explain clearly to the customers about their menu and double confirm with the menu order by the customers. McDonald’s also can provide more type of language for the customers so that they can choose the language they know. Besides that, for KFC, the respondents have gives some opinions and comments which the KFC’s staff needs to increase the speed of services to ensure that the customers no need to wait and queue for a long time to get the food.

The KFC’s staff also needs to be polite when serving their customers. The KFC can conduct a programme which the main objective is to train their staff to be polite when serving customers to avoid their staff argue with the customers. This can decrease the complaints from the customers. When they receive complaint from customers, they need to know how to deal with the customers promptly. So, KFC may give the empowerment to their staff and give training to their staff how to make decision when dealing the complaint from customers.

Lastly, KFC need to upgrade their staff’s appearance and image. For example, KFC can set up guidelines for their staff how to improve their image and appearance. If the staff looks tidy and clean, customers will be more confident to buy their products. On the other hand, the customers will never buy their products if their staff looks messy and dirty. Therefore, we suggest that the recommendations mentioned above might be encouraged more customers to buy their products and be more satisfy when buying their products as well as both McDonald’s and KFC improved their customer services.

McDonald’s Corporation is leading global foodservice retails with more than 30,000 local restaurants by serving 52 million people in more than 100 countries per day. Besides more than 70% of McDonald’s restaurants worldwide are owned and operated by independent local men and women. The corporation founded by Ray Kroc and it is continued with McDonald’s vision with global brand image.

McDonald’s Corporation is the world’s largest chain of fast food restaurants supply and selling of like hamburgers, cheeseburgers, chicken products, French fries, breakfast items, soft drinks, milkshakes and desserts. It also offers salads, fruit, snack wraps and carrot sticks. The company suits American way of life. And it is globally expanded and has many international markets. The decision of McDonald’s franchises restaurants depends of the selection of candidates and the management in that country where the restaurant is located makes it locally.

McDonald’s restaurant – it is an best opportunity to own the restaurant. While selecting the organization seeks the individuals who have business experience with capability of undertaking multiple business units. At present that company has more than 2400 Owner/Operators outlets thereby growing the business and making money.

Two options available to have the Franchise with McDonald’s Corporation. Purchase of EXISTING RESTAURANT from McDonald’s Corporation or from a McDonald’s Owner/operator OR purchase of NEW RESTAURANT. Initial down payment is required to have franchise. 40% of the total cost is required for New Restaurant and 25% of total cost for existing restaurant required. The down payment can be accepted cash, securities, bonds, debentures, vested profit share etc.

The total cost varies from restaurant to restaurant. However $250,000 non-borrowed personal resources required. The remaining balance should be payable by the buyer with a term of not more than seven years. During the term of franchise, the buyer has to pay the fees to the McDonald’s in the type of service fee i.e. 4% which is based on restaurant’s sales performance and Rent which is also based on monthly sales.

Training also provided to the buyers between 9 to 24 months. McDonald’s give training to the franchisees and others at Hamburger University in Oak Brook, Illinois. It is also expected that average revenue per store is $633,000. .  Recently McDonald’s issued circular that the initial franchisee fee is $45,000. it is also estimated that the initial investment required for a traditional restaurant ranges from $730,750 to $1,549,000.

UFOC

In the United States, all Franchisee agreements fall under the jurisdiction of a state and federal laws. Hence Franchisers are required by the Federal Trade Commission to have a Uniform Franchise Offering Circular (UFOC). While going for franchise, ensure that it is complied with UFOC i.e. Uniform Franchise Offering Circular. It is a legal document and necessarily to be used in the United States.

The Franchisers must give a UFOC to franchisees at least 10 business days before any contract is signed and before any money transaction between each other. The documents contains every information about a franchiser and includes the following:

1. The Franchiser, its Predecessors and Affiliates
2. Identity and Business Experience of Key persons
3. Litigation history
4. Bankruptcy
5. Initial Franchise Fee
6. Other Fees and Expenses
7. Franchisee’s initial investment
8. Restrictions on sources of products and services
9. Obligations of the Franchiser
10. Territory
11. Trademarks
12. Patents and Copyrights
13. Obligation to the Franchisee to participate in the actual operation of the financial business
14. Restrictions on goods and services offered by the franchisee.
15. Renewal, Termination, Repurchase, Modification and/transfer of the franchise agreement
16. Public figures
17. Earnings claims
18. List of Franchise outlets
19. Financial statements
20. Contracts

Conclusion

McDonald’s allows giving the franchises to the US applicants and well as non-U.S. applicants who are outside of the U.S. The McDonald’s franchise can be taken by any type of persons like individuals i.e. proprietorship, companies, partnership firms etc. The McDonald’s Corporation business model is different from other fast food chains. The other fast food corporations will collect only Franchise fees, supplies, and percentage of sales. But the McDonald’s Corporation collects rent also besides others. The Franchise agreement with McDonald’s indicates that the corporation owns the properties on which most McDonald’s Franchises are located.

References

1. http://www.mcdonalds.com/corp/about/mcd_faq/franchising.html
2. http://www.mcfun.com/
3. www.entrepreneur.com
4. http://www.franchiseprospector.com/franchising-trends/mcdonalds-franchise-profile.php
5. http://www.goldlawgroup.com/McDonalds-Franchises.html